Ellies Holdings Limited is making significant strides in redefining its market presence. The latest development involves the proposed acquisition of Bundu Power, a move that aligns with Ellies’ strategic shift towards becoming a smart infrastructure business.
The journey began on February 1, 2023, when Ellies announced its intent to acquire 100% of the members’ interests in Magetz Electrical Proprietary Limited and Power on Wheels Proprietary Limited, collectively known as Bundu Power. The initial announcement outlined a maximum consideration of R207.6 million.
Subsequent to the initial announcement, Ellies, the Vendors, and Bundu Power have now entered into an amended and restated share purchase agreement, providing a more detailed framework for the acquisition.
Bundu Power, a specialist in the distribution and rental of generators and the distribution and installation of solar and ancillary products, aligns with Ellies’ vision of becoming a comprehensive smart infrastructure provider. The acquisition positions Ellies to offer alternative energy solutions across residential, commercial, industrial, hospitality, agricultural, and recreational sectors.
The total consideration for the acquisition is R207.6 million, with Ellies opting to fund the transaction through a debt facility. This strategic financing approach leads Ellies to put the proposed fully underwritten rights offer, initially valued at R120 million, on hold.
|R1 million each
|Sept 2023 – Jan 2024
|R26.3 million each
|Within 60 days of Feb 2024 & Feb 2025
The financial snapshot of Bundu Power, as of February 28, 2023, reveals net assets valued at R77.7 million, an after-tax profit of R32.4 million for the year ending February 2023, and an estimated profit after tax of R33.94 million for the year ending February 2024.
The acquisition is contingent on several conditions precedent, including approval from Ellies’ directors and shareholders, successful due diligence, non-competition agreements, and unconditional approval from the Competition Authorities. These conditions must be met by January 31, 2024, unless extended by the parties.
Ellies has also granted the Sellers a call option, allowing them to repurchase members’ interests should Ellies fail to meet payment obligations. However, this call option can be voided if Ellies provides alternative security, satisfying the Sellers.
The proposed acquisition falls under the category 1 transaction as per the JSE Listings Requirements, necessitating approval from Ellies shareholders in a general meeting. A comprehensive circular containing details of the acquisition and a notice of the general meeting will be distributed to shareholders by January 31, 2024.
As of this announcement on December 4, 2023, Ellies withdraws the cautionary issued on September 28, 2022. Shareholders are no longer required to exercise caution when dealing in their Ellies shares.
In reshaping its future, Ellies Holdings is strategically positioning itself in the evolving landscape of smart infrastructure, with Bundu Power as the cornerstone of this transformation. The acquisition not only expands Ellies’ alternative energy solutions but also fortifies its Southern African distribution network, opening new avenues for growth and innovation.